Friday, January 15, 2010

EU Commission To Investigate Baltic Feeder Shipping Agreement

Baltic Max Feeder May Contravene Competition Laws
Shipping News Feature

EUROPE – The European Commission has opened an antitrust investigation into the Baltic Max Feeder agreement which was designed to lay up excess vessels on the European feeder routes with the cost being shared between members of the group collectively.

The investigation is to look at whether this practice is in fact reducing capacity on these routes in order to push up charter rates for those who utilise the services. If so then this would constitute a breach of Article 101 of the Treaty on the Functioning of the European Union (TFEU) which addresses the use of restrictive business practices.

The European feeder shipping service sees smaller container vessels employed on short-sea services between various European docks to the big deep-sea ports, such as Felixstowe, Rotterdam and Hamburg, where their loads are consolidated for shipping on the much larger trans-oceanic container ships.

The EU said in a statement on the decision to open the investigation that: “Opening antitrust proceedings does not mean that the Commission has conclusive proof of an infringement. It only signifies that the Commission will conduct an in-depth investigation of the case as a matter of priority.”

The scheme, when first proposed last year, met with criticism from the feeder operators who believed that the idea, the behest of the ship owners and banks, would indeed fall foul of the EU’s antitrust laws.